Crisis management research: When your brand’s celebrity endorser misbehaves
Muck Rack , April 16, 2019
New research in the INFORMS journal Management Science took an in-depth look at 128 events of negative publicity tied to a celebrity endorser between 1988 and 2016. These events affected sponsors in 230 actual cases. What gives the research its punch is that it evaluated the effectiveness of company responses to celebrity endorsers’ misbehaviors using those companies’ daily abnormal stock returns. In other words, if a brand encountered a celebrity endorser crisis, as Nike did when Tiger Woods made news over his notorious marital problems, the study authors took into account the surrounding negative publicity’s impact on the company’s stock price.
